BIR Ruling

October 15, 1971 Sycip, Gorres, Velayo & Co. Certified Public Accountants P.O. Box 589, Manila Attention: Mr . M . Gutierrez Tax Division Gentlemen : In reply to your letter dated June 10, 1971, I have the honor to inform you as follows: aisa dc Oil extracted from corn germ either by mechanical or chemical process constitutes manufacturing, subject to the 7% sales tax under Section 186 of the Tax Code. (BIR Ruling No. 65-135, December 20, 1965). Gluten feeds, a by-product in the manufacture of corn starch, like corn oil is subject to the said 7% tax. Proprietors or operators of corn mills are no longer subject to the 2% miller's tax under Section 189 of the Tax Code because of the amendment effected by Republic Act No. 3704 subjecting them only to the annual fixed tax under Section 182(A)(3)(mm) of the Tax Code, as further amended by Republic Act No. 6110. Pioneer enterprises registered with the Board of Investment are, however, exempt from all taxes except income tax, pursuant to Section 8(a) of the Investment Incentives Act (Rep. Act No. 5186) which provides as follows: "Sec. 8. Incentives to a Pioneer Enterprise . In addition to the incentives provided in the preceding section, pioneer enterprises shall be granted the following incentives benefits: "(a) Tax Exemptions . Exemption from all taxes under the National Internal Revenue Code, except income tax, to the following extent: "(1) One hundred per cent up to December 31, 1972; "(2) Seventy-five per cent up to December 31, 1975; "(3) Fifty per cent up to December 31, 1977; "(4) Twenty per cent up to December 31, 1979; "(5) Ten per cent up to December 31, 1981." cd Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue